The vast majority of the world accepts that climate change is happening, though some conservatives in America doubt whether it is man-made or not. Here’s another question: what does global warming mean for your homeowners insurance?

The natural forces tied to climate are significant risks to homes and big factors in determining insurance premiums. Changes in those risks mean changes to premiums and policies.

How Climate Is Changing

Scientists at American universities, in the UK, in South America, and even the United Nations agree that climate change is already happening. Glaciers are melting and this is evidence, but there’s more. Record floods and droughts in Sri Lanka, Brazil, and China, as well as deadly heat waves in the United States and across Europe, are all consistent with the projections from climatologists.

It’s not just that the planet is getting hotter – it’s that it is getting hotter in some places, cooler in others, and currents and weather patterns are changing. Desert could become rainforest, prairies swamps, and tundra could be eradicated altogether.

What Insurers See

Insurance companies look at climate change and they see chaos. The statistics they have used for a long long time are quickly becoming irrelevant. They won’t be quite certain how to determine how at risk a given home is to disaster.

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The year 2011 has been one for record natural disasters. The Texas wildfires currently raging are already causing never-before-seen damage in the state to forests, animal habitats, and human homes. This damage continues hurting even after the fires are done. The only thing protecting homeowners in the 25 thousand scorched acres is insurance.
Big disasters can be huge tests of the viability of an insurance company. Make sure your insurer is up to the test.

Damage from Wildfires

Wildfires have always been a problem in the Southwest and always will be, if climate change doesn’t turn it into a tropical zone. The problem will likely only get worse as more of the precious few water resources are tapped out in Texas and other border states.
Wildfires can start from almost anything, whether it be spontaneous combustion from the sun or a cigarette tossed into the woods. The key is parched woodland from lack of rain, intense sunlight, and heat. Once a fire gets going, it’s very hard to stop. Part of the reason is the incredible amount of fuel available – so many trees – and another part is the inability to predict which way it goes. Fires spread by wind to anywhere where a flame or even an ember can blow.
In this Texas wildfire, 500 homes are already been destroyed in the conflagration, with no end in sight. The 25 thousand acres of land affected could double or triple before this is over, the fire department says. Continue reading →

Even if you read your policy very careful, you might still be surprised these 10 things are not covered.

#1: Currency

Some people think keeping money under their mattress is safer than keeping it in a bank. At least money in banks are insured! If you have cash lying around, under the mattress, or even in a safe or lock box, it will probably not be reimbursed under the terms of your homeowners or renters insurance.

#2: Water Damage from Backups and Floods

Unless you have flood insurance, nowadays insurance companies won’t cover water damage caused by flooding or storms.

What most policies do cover burst pipes and damage from accidents or non-flood disasters.
Don’t expect sewage backups or other pipe backups to be covered standard though. What you need is “sewer backup coverage”.

#3: Trampolines

Depending on your state, you might not get coverage for your trampoline. Obviously, no trampoline repairs, but the bigger concern is your liability from injuries incurred during trampoline use. Over 100 thousand injuries happen each year due to trampolines.

In some places and with some companies, you might be disqualified from getting any property liability coverage at all if you put in a trampoline. And don’t think about not telling your insurer, because they can void your whole contract if they learn about it.

You should also be concerned about the damage to your home or others that a trampoline can cause if it is blown away in a storm. At the very least, bolt it down. Continue reading →

As we move into fall, there’s still time for one more quick break. It’s good to get away for a long weekend before winter comes – except for those of you in the south, of course, where it manages to be summer all year round. So the first rule is not to tell all your friends on Facebook or any of the other social network sites. No posting of photographs showing you enjoying a margarita by the beach. Similarly, stop tweeting your instant reactions to the hotel or the food in the restaurant. It’s bad enough you telling the world you have the type of lifestyle that makes it worth a burglar’s time breaking into your home. But also telling the burglar you’re not home. . . Indeed, any real-time messaging to the world describing what you do, where you shop, what food you enjoy, and so on gives thieves a shopping list of what to steal.

Did you know most burglaries take place during the holiday periods when there are fewer people around in your neighborhood and the thieves know your home is unoccupied. Remarkably, many do not actually have to break anything to enter. It seems we’re very forgetful when it comes to locking doors and securing windows. Some thieves don’t actually bother entering the home but force open the garage or shed, taking bicycles and anything else easily moved and saleable. So, if you’re going away, what precautions should you take? The first step is to create the impression your home is still occupied. You can buy timers for lights and electrical equipment. Leaving the curtains or blinds slightly open, you can program the television to come on. Ask neighbors to spend time inside your home in the evenings. Then cancel deliveries of the newspaper or anything else that will signal your absence. Continue reading →

Over the last week, the international headlines have been dominated by the disaster in Japan. First came the earthquake registering 9.0 on the Richter Scale. This makes it one of the most severe earthquakes since accurate record-keeping began. Then came the tsunami. With only minutes, there was no evacuation. Instead, a wall of water some thirty feet high, swept everything in its path to destruction. Now we watch as Japan struggles with a nuclear disaster in one of its major power stations. At times like this, our hearts go out to the survivors. It’s one of the worst tragedies in a developed economy for the last ten years. But this is not just a time to reflect on how fragile the Earth is and how easily our civilization can be disrupted. We must also look to home and review the preparations we have made should there be local problems.

The West coast sits on the Pacific Ring of Fire and, at some point, there may be a major quake affecting California. We should wonder whether the nuclear power plants in the areas most at risk will fare better than those in Japan. Southern California proudly boasts the design for the San Onofre Plant will survive a 7.0 quake. As a word of explanation, every change in a whole number, say from 7.0 to 8.0 means the quake is ten times as strong. It would not hurt to look carefully at the safety issues at all plants close to areas at risk of a quake. Continue reading →

Somewhere lurking away in one of those Christmas carol CDs is a happy chorus along the lines of , “Winter is a coming in, so loudly sing tra la. . .” or hey-nonny-nos to that effect. It’s all supposed to reassure you that all this white stuff falling out of the sky is great Christmas decoration and there’s nothing to worry about as those icicles form on the power lines. Ah, if only t’were so. The weight of snow on your roof can find any weakness. Come the thaw and melt water can seep through into lofts, bring down ceilings. That’s assuming the ice hasn’t burst your pipe before the thaw. All this good cheer should reinforce the basic message that a little prevention will keep you warm and the house secure.
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Have you ever tried to predict a hurricane? Ever watched the meteorologists on television try? It’s frustrating at best and completely insanely impossible at worst.

Yet insurance providers have to try. Otherwise, they wouldn’t know how much to charge for hurricane insurance.

Insurance Companies Use Computer Models to Try to Predict Hurricanes

In order to try to get a useable number so that they can decide 1) if they should provide you with hurricane coverage, and 2) how much they should charge you for hurricane coverage, insurers use extremely complex computer models. These models feed off of scientifically gathered data about weather systems, climate patterns, and ocean currents.
Since literally trillions of dollars are riding on it, you’d bet these computer models would be pretty accurate, huh?

You’d be wrong. Continue reading →

State to state, insurance is regulated differently across the United States. While regulation is only one factor in the price consumers pay to insure their homes – the others being wealth, climate, weather, geological dangers, and competition – it is the factor most easily influenced by humans. Insurance regulation is deeply tied up in state politics, so it becomes a hot subject.

The latest spat of statistics has been released across the country and show that Texans pay the most on average to insure their homes. This has led to some backlash from consumers and a push for state legislatures to do something about it. However, many doubt that state regulation is the issue. How true is that?

Texas state has the least amount of insurance regulation in the country

This is the tag-line used to blame government for high insurance prices. Indeed, Texas has very little regulation. Insurance providers need only to submit their rates to the government before they begin writing policies at that level – they do not even need government approval. A new bill pushes for a necessary approval from an insurance commissioner before insurers can change rates.

However, could the other factors be to blame? Continue reading →

Every year, there’s a survey of customer satisfaction with the insurance industry. This year, the satisfaction level with companies offering cover for damage to home and contents is at an all-time low. In part, this is caused by the recession. As families are under more financial pressure, they look to the insurers for more generosity in repairing or replacing property only to find reluctance to pay. But about half those surveyed did not actually know what type of coverage they had on their homes. The dissatisfaction is more often caused by misunderstandings about exactly what the policies cover. Nationally, this is leading to lower levels of retention as customers move from one insurer to another, always hoping to find better value. One issue is proving particularly troublesome. When surveyed, people tend to have fire uppermost in their minds. Yet the statistics show the risk of fires is quite low.

The risk of flooding is significantly higher. There are two reasons for this. The first is more storms have affected the US, in some cases, dumping vast amounts of rain in very short periods of time. Whether this is climate change is not the issue. It’s actually happening. The second is there has been a steady increase in the level of building in flood-hazard areas. Just living there is bad enough. Covering up land that would struggle to absorb the water without putting in proper drains just makes the problems worse. Because the risk of flooding is now higher, many insurers either exclude the risk altogether or offer only very limited coverage. You should check your policy to see whether “water damage” is included. This is defined as any situation in which water causes loss or damage to either the structure or contents. It can be frozen pipes during winter, or rain coming through a displaced roof tile, or water rising from the local sewers, or a local river bursting its banks.
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If you are looking for insurance for your home, or any insurance for that matter, it is always best to know exactly what the insurance company is offering you before you sign the dotted line. Most Americans have a general idea on how insurance works when you are protecting your home, and how most forms of insurance work as well. But when it comes right down to it, every single insurance policy is different, and simply knowing the basics may not cut it when it comes down to your house insurance. Before you start getting quotes for your insurance, you want to be sure that you know every possible aspect of house insurance, or you may wind up with a policy that won’t help you when you need it most. Not educating yourself on the ins and outs of house insurance could wind up costing you thousands of dollars down the road, or right now through your premiums. Here we will talk about the most important things you need to know about your insurance policy.

The United States experienced their worst natural disaster along the Gulf Coast in 2005 when Hurricane Katrina hit. This caused a huge housing situation as residents were dislocated, lost their homes, or all of the above. This disaster ended up being the most expensive disaster in American history, for the government, and for the insurance companies. It also cost the residents of the Gulf Coast hundreds of thousands of dollars because many did not have the proper housing insurance on their assets. These citizens made the mistake of trusting that the insurance companies had their back, when it came right down to it, in some cases they just didn’t, because they didn’t have to. Continue reading →